Okay so I just want to get this straight in my head and would appreciate some validation...
For Early Exercise on a call:
1) Gain = dividend yield on the stock price
2) Loss = interest on K + implicit put value
Optimal if 1>2
For Early Exercise on a put:
1) Gain = Interest on K
2) Loss = dividend yield on stock price + implicit call value
Optimal if 1>2
For Early Exercise on a call:
1) Gain = dividend yield on the stock price
2) Loss = interest on K + implicit put value
Optimal if 1>2
For Early Exercise on a put:
1) Gain = Interest on K
2) Loss = dividend yield on stock price + implicit call value
Optimal if 1>2
Gain and Loss on early exercise
